10-QPeriod: Q2 FY2023

FIFTH THIRD BANCORP Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 7, 2023For Securities:FITBFITBOFITBPFITB-PIFITB-PMFITB-PAFITBIFITB-PK

Summary

Fifth Third Bancorp (FITB) reported solid financial results for the second quarter of 2023, demonstrating resilience in a dynamic economic environment. The bank reported a net income available to common shareholders of $562 million, or $0.82 per diluted share, a notable increase from the prior year's $526 million ($0.76 per diluted share). This growth was primarily driven by a significant increase in net interest income, up 9% to $1.5 billion (FTE basis), fueled by higher market interest rates that boosted yields on loans and securities. The bank also saw an improvement in its net interest margin to 3.10% (FTE basis). Noninterest income saw a modest increase of 7% to $726 million, bolstered by a strong performance in mortgage banking net revenue and commercial banking revenue. Total revenue on an FTE basis grew 8% year-over-year to $2.19 billion. Despite an increase in the provision for credit losses to $177 million, largely due to a deteriorating economic forecast and specific reserve increases on commercial loans, the Bancorp maintained strong capital ratios. The CET1 capital ratio stood at a robust 9.49%. The bank also highlighted its commitment to returning capital to shareholders, declaring a common stock dividend of $0.33 per share, up 10% from the prior year. Management's focus remains on prudently managing liquidity, with a strong core deposit base and ample liquidity sources.

Financial Highlights

41 data points
Beta

Revenue

$144.00M

Net Income

$601.00M

417.4% Net Margin

EPS (Diluted)

$0.82

Total Assets

$207.28B

Cash & Equivalents

$2.59B

Free Cash Flow

$345.00M

Financial Statements
Beta
Revenue$144.00M
Interest Expense$913.00M
Net Income$601.00M
EPS (Basic)$0.82
EPS (Diluted)$0.82
Shares Outstanding (Basic)684.03M
Shares Outstanding (Diluted)686.39M

Key Highlights

  • 1Net income available to common shareholders increased 7% year-over-year to $562 million, or $0.82 per diluted share.
  • 2Net interest income (FTE basis) grew 9% to $1.5 billion, driven by higher market interest rates and increased loan and security yields.
  • 3Net interest margin (FTE basis) improved to 3.10% from 2.92% in the prior year's quarter.
  • 4Total revenue (FTE basis) increased 8% to $2.19 billion, supported by growth in both net interest income and noninterest income.
  • 5Provision for credit losses increased to $177 million from $179 million due to economic forecast deterioration and specific reserve increases.
  • 6Common Equity Tier 1 (CET1) capital ratio remained strong at 9.49%, exceeding regulatory requirements.
  • 7Mortgage banking net revenue saw a significant increase of 90% to $59 million.

Frequently Asked Questions

Fifth Third Bancorp reported a net income of $601 million and a net income available to common shareholders of $562 million for the second quarter of 2023. This translates to $0.82 per diluted share.

Net interest income on an FTE (Fully Taxable Equivalent) basis increased by 9%, or $121 million, to $1.5 billion for the second quarter of 2023, compared to $1.3 billion for the same period in 2022. This growth was primarily attributed to higher market interest rates leading to increased yields on loans and securities.

Fifth Third Bancorp maintained strong capital ratios as of June 30, 2023. The Common Equity Tier 1 (CET1) capital ratio was 9.49%, the Tier 1 risk-based capital ratio was 10.73%, the Total risk-based capital ratio was 12.83%, and the Leverage ratio was 8.81%. These ratios are well above the minimum regulatory requirements.

The provision for credit losses for the second quarter of 2023 was $177 million, a slight decrease of 1% from $179 million in the second quarter of 2022. The increase in the allowance for credit losses was driven by a deterioration in the economic forecast and increases to specific reserves on individually evaluated commercial and industrial loans.